Japanese earthquake relief: tax rules for international donation deductions

I grew up in tornado country. I lived six years where hurricanes regularly hit (Frances and Jeanne did slam us in 2004). But earthquakes scare the devil out of me. No warning. Your world just starts rocking and not in a good way.

My heart goes out to everyone in Japan who's suffered losses of friends, family and property today following the 8.9 earthquake, subsequent aftershocks and tsunami.

I used to work for a multinational company with offices in Japan. Many of the people I met in our Japan operations became more than coworkers; they are friends and I hope they are OK.

If you have friends or family in Japan, Google has created an online people finder program that could help you track them down and make sure they made it through the temblor.

Long-distance assistance: When you live thousands of miles away from a disaster, the only way you can realistically help is to support groups that put together on-the-ground relief efforts. If you want to give to such an organization, great.

Sadly, though, I must point out that scum too often try to take advantage of people's goodwill and set up bogus disaster assistance programs. That's particularly easy whne the event is so far away.

So first, take some time to check out any Japanese earthquake help pleas you might receive. Trust me, the folks in Japan are going to need help for a while, so being deliberate in finding an appropriate nonprofit is not going to materially hurt your somewhat delayed gift.

Your safest bet is to donate to a well-known agency, such as the Red Cross, which is already following the Japanese situation as well as possible damage that might come if tsunamis hit Hawaii or elsewhere.

Deducting international donations: And while it is most definitely not the reason any of us give when disasters strike, remember than your gift could provide you a tax deduction on your taxes.

Such outpouring of financial help to an international disaster and the tax considerations of donors was quite evident following last year's Haitian earthquake.

In situations where the area of need is outside the United States, in order for your gift to be tax deductible, you need to give to a charity that is registered in the U.S. as a charitable organization. U.S. tax law does not allow for deduction of direct contributions to foreign charities.

So you want to look for an organization that has IRS-approved tax-exempt status and which has a special fund designated for overseas relief efforts.

That shouldn't be too hard. Many U.S.-based nonprofits do provide global aid. In those cases, your gift will help those in need beyond our borders and qualify as tax deductible.

Related posts:

• Tax rules ror charitable giving
• Special tax breaks proposed for Haitian earthquake relief donations
• Haiti earthquake anniversary and charitable deduction reminder
• Tax relief for disaster victims 
• Dealing with disaster
• Keep the giving going

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